U.S. stocks opened sharply lower on Friday after data showed a lower-than-expected rise in nonfarm payrolls in September, raising doubts that the economy is strong enough to absorb an interest rate increase this year.

A small hike in rates could help calm volatile equity markets and start giving the Fed some ammunition to deal with any future economic slowdowns.

The Dow Jones industrial average fell 84.05 points, or 0.52 percent, to 16,187.96, the S&P 500 lost 14.19 points, or 0.74 percent, to 1,909.63 and the Nasdaq composite dropped 58.21 points, or 1.26 percent, to 4,568.88.

NEW YORK (Reuters) - U.S. Treasury debt prices rose on Friday with benchmark yields falling to their lowest in 5-1/2 weeks as a weak jobs report for September reduced economists' expectations that the Federal Reserve will raise interest rates this year.

Employers hired 142,000 people last month, far below the 203,000 forecasters expected and August numbers were revised lower to show only 136,000 jobs were added in August, the U.S. Labor Department said.

"The U.S. economy has been the one shining star globally and the report creates doubts on that front," said Priya Misra, head of global rate strategy at TD Securities in New York.

Benchmark ten-year Treasuries notes US10YT=RR were up more than 1 point in price to yield 1.918 percent, down 12 basis points from late Thursday.

The 30-year bond US30YT=RR was up almost 2 points in price with a yield of 2.758 percent, down 9 basis points on the day.

((Reporting by Tariro Mzezewa; Editing by Nick Zieminski)

by cassandra.garrison10/2/2015 2:02:37 PM

Global weakness weighing on U.S. job growth: White House adviser

WASHINGTON (Reuters) - Economic weakness overseas is spilling onto America's shores and weighing on U.S. job growth, a top White House economic adviser said on Friday after the government reported that non-farm employment expanded by just 142,000 in September.

"There is no doubt that the events happening in the rest of the world are affecting the U.S. economy," Council of Economic Advisers Chairman Jason Furman told CNBC. "Broadly, we're really happy to see the unemployment rate where it is but the events in the rest of the world, they matter for us here in the United States."

“Kind of a 1-2 punch certainly to the economic bulls out there and also those that were anticipating a Fed hike earlier rather than later. Market participants in general will look at this number and say this probably pushes out the probability of a Fed tightening to beyond the October meeting."

LONDON (Reuters) - Oil fell on Friday, reversing earlier gains after non-farm payrolls data came in weaker than expected which clouded the demand outlook from the world's largest oil consumer.

U.S. employers slowed hiring over the last two months and wages fell in September, raising new doubts the economy is strong enough for the Federal Reserve to raise interest rates by the end of this year.

"The jobs data was lower than expected so it softens the picture for the U.S. a bit," said Olivier Jakob, analyst at Petromatrix in Zug, Switzerland.

Global benchmark Brent fell 20 cents to $47.49 a barrel by 1308 GMT. The contract had closed the previous session down 68 cents. U.S. crude was 8 cents at $44.82 a barrel.

The downward move was much more muted than for other assets such as stocks due to weakness in the dollar.

U.S. and European stock markets sank on Friday in response to drastically poorer than expected U.S. jobs numbers which weakened the case for a rise in Federal Reserve interest rates this year.

The payrolls numbers showed hiring outside of farming of just 142,000 last month, short of a consensus forecast of 203,000, while August figures were revised sharply lower to show only 136,000 jobs were added a month earlier.

Europe's major stock markets, which had been up around 1.5 percent on the day, fell back into negative territory while futures showed Wall Street would fall around 1 percent on opening.

That all came at the end of what has already been a wild week for markets due to concerns over China, commodities prices and related stocks like Glencore.

ReutersWall Street looked set to open sharply lower on Friday after data showed a less-than-expected rise in nonfarm payrolls in September, raising doubts that the economy is strong enough to allow the Federal Reserve to raise interest rates this year.

(Reuters) - Wall Street looked set to open sharply lower on Friday after data showed a less-than-expected rise in nonfarm payrolls in September, raising doubts that the economy is strong enough to allow the Federal Reserve to raise interest rates this year.

U.S. employers added 142,000 jobs, compared with 136,000 in August and below the 203,000 that economists polled by Reuters had expected. August figures were also revised sharply lower.

The jobless rate held steady at 5.1 percent but average hourly wages fell by a cent to $25.09 during the month, and were up only 2.2 percent from the same month in 2014.

Oct 2 - U.S. Treasuries prices jumped on Friday with yields falling to their lowest levels in 5-1/2 weeks as a deeply weak U.S. jobs report for September reduced traders' view the Federal Reserve would raise interest rates later this year.

The Labor Department said employers hired 142,000 workers last month and August figures were revised sharply lower to show only 136,000 jobs added in August.

Benchmark 10-year Treasuries notes were up nearly 1 point in price for a yield of 1.940 percent, down 10 basis points from late on Thursday.

Oct 2 U.S. stock index futures turned negative on Friday after data showed a less-than-expected rise in non-farm payrolls in September, raising doubts that the economy is strong enough to allow the Federal Reserve to raise interest rates this year.

Non-farm payrolls increased by 142,000, compared with 136,000 in August and below the 203,000 that economists polled by Reuters had expected. August figures were also revised sharply lower.

BARCELONA Spain mounted a sweeping anti-terror operation on Friday after a suspected Islamist militant drove a van into crowds in Barcelona, killing 13 people before fleeing, in what police suspect was one of multiple planned attacks. | Video

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